Evidence lower interest rates are benefiting the community: RBA's March emergency meeting minutes

In their emergency meeting in March where they cut the official interest rate to a record low 0.25 per cent, the RBA members noted that there was evidence lower interest rates were benefitting the community as a whole.

RBA governor Philip Lowe said the members noted the decline of 1.25 per cent over the preceding year as a substantial easing of monetary policy.

However he added that to date the lower rates had been "boosting the cash flow of businesses and the household sector as a whole, and also helping trade-exposed industries through the exchange rate channel."

Lowe said that members acknowledged that very low interest rates have uneven effects and negative consequences for some people – especially those relying on interest income – but the evidence was that lower interest rates were benefiting the community as a whole.

"Members supported the proposal and agreed that the cash rate would not be increased from its lower level until progress is made towards full emplyment and there is confidence that inflation will be substantially within the two to three per cent target range", Lowe noted.

The RBA have had a steadfast unemployment rate target of 4.5 per cent. The latest data has it pegged at 5.1 per cent, however that was calculated before the recent COVID-19 job losses.

Some economists are tipping the unemployment rate to reach over 11 per cent, so don't expect a rate hike anytime soon.

Lowe said it was "considered likely that the cash rate would remain at a very low level for an extended period", while he further ruled out any change of rates going in to negative.

To read the full RBA minutes, click here.